My take on the commodity supercycle and stock market zeitgeist...and the new era of precious metals, uranium (just bottoming, btw)and alternate energy. As I have said here since 2005 "Get ready for peak everything, the repricing of the planet and "black swan" markets all over the place".

1 May 2009

Please, no more advice, I can't afford it!

Australian financial planners were fatally wounded by the temptations of trailing commisions, feeder payments, complacency, tieups with lenders and a passion for margin loan based strategies and sheer over supply. Three quarters of the profession need to retrain for new careers because the party is well over. Based on their relationships with their clients over the past year some may have gained insight into the nature of suffering and the pitfalls of hubris, so for them, I suggest new work as monks and grief counsellors.

Agriculture for the rest so they gain insight into the real effort required for authentic growth.

FINANCIAL planners have lost 215,000 clients in the past year, according to a survey that paints a bleak picture for the beleaguered industry.

The Financial Planning Affection study by independent research group CoreData found an estimated 215,000 clients has deserted their planner over the past 12 months, pointing the blame mostly at the poor performance of their investments and the quality of advice from their planner.

CoreData partner Craig Phillips said another round of desertions was likely since the survey found almost a third of clients who still had "active ongoing advice relationships'' with planners said they were "very likely'' to cease using an adviser at all.

That was a marked deterioration from November, when only 4 per cent said they were considering the same action, and contradicted other recent surveys that suggested clients were mostly remaining loyal despite the plummeting value of their investment balances.

"Some clients exited the market soon after the downturn began, but the unfortunate thing we're now seeing is that large numbers of those who decided to wait and see have lost faith in the upside they can expect over the foreseeable future,'' Mr Phillips said.

"My guess is that when we visit this again in six months' time, we are going to see more and more people severing the relationship.''

The number of lost clients was not a net figure, but Mr Phillips said CoreData's research also showed there had been an overall drop in the number of Australians using a planner. About 5 million Australians use some sort of financial advice according to CoreData.

The financial planning industry has been under increasing pressure since the onset of the global financial crisis.

The main reasons cited by those in the survey for leaving their adviser were the level of financial return (73.4 per cent), quality of advice (72.6 per cent), and poor or infrequent communication (62.1 per cent).

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No man is free who is not master of himself.A ship should not ride on a single anchor, nor life on a single hope.Fortify thyself with contentment: that is an impregnable stronghold.

If you desire great things, do not attempt to lay hold of them with little effort; but give up some things entirely, and postpone others for the present.

Epictetus

The first and greatest victory is to conquer yourself; to be conquered by yourself is of all things most shameful and vile.

Plato

“The great enemy of clear language is insincerity. When there is a gap between one's real and one's declared aims, one turns, as it were, instinctively to long words and exhausted idioms, like a cuttlefish squirting out ink.”

George Orwell

Any one who thinks, and is determined to let nothing stop him from thinking, is a philosopher . . .R. G. Collingwood ~An Essay on Philosophical Method, 15.

Civilisation came through two things chiefly: the home, which developed those social dispositions that form the psychological cement of society; and agriculture..... But it was woman who gave man agriculture and the home; she domesticated man as she had domesticated the sheep and the pig. Man is woman's last domestic animal, and ....the last creature that will be civilised by woman. The task is just begun.

Will Durant

Great perils have this beauty, that they bring to light the fraternity of strangers.

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What we now suffer in economics is a hardness of intellect, a meanness of spirit, a narrowness of vision and a rigidity of thinking that utterly distorts the role of what economics in our society should be. Instead of economics being our tool for societal advancement, happiness, health, and sustainability, the profession has lost its way in econometrics, neo-liberal cant and equlibrium theory. It has become little more than cheerleaders to our enslavement to a towering edifice of debt, consumption and greed and the mouthpiece of vested interests. Unless repudiated we face not only economic but soceitial and ecological collapse. KMcKern ~ News Kontent